Asian Paints Ltd # Head and Shoulder pattern, RR - 1:2, ShortShorting Opportunity if it breaks neckline...Pls share your positive input to make this analysis more effective....
Note - I am new learner on this forum.... I may have done some mistake while analysing...I request all especially seniors to share your views if you find something good or weak area in my analysis.
Pls do your own research before taking any trade based on this analysis
Regards
Shyam Kumar
ASIANPAINT trade ideas
Asian Paints already reversed from its trend!Asian Paint is following nifty in terms of RSI, a bearish divergence has been seen.
Current PE ratio of Asian Paints is high as per industry PE ratio.
Also 3 bar reversal pattern can be seen in monthly chart, indicating a long term downfall in Asian paints.
ASIANPAINT - Local Bearish DivergencePremise:
1. A retrace to the OTE will occur
2. The bullish divergence will fully play out, bringing the price to the OTE
3. This retrace upwards will be in more than 5 candles
4. A bearish divergence will thus appear
Execution:
1. 1:2:3 Short scale inside 1237-1240
2. Stop at 1286
3. Target is a long term support region at 1043 (zoom out :) )
Result:
1. A 6.26:1 RR trade is executed
AsianPaints, Resistance AP at crucial resistance of 1340-- highest Call OI. It is also a Triple Top pattern. Crossing this will give a big breakout. Price took support at 50 DMA. Unable to take out the level of 1340 decisively, will correct and consolidate for sometime. Consumption theme. Covering this market leader since the bottom was formed. It is a buy on correction.